Voya Financial (NYSE: VOYA) and Lincoln National Corporation (NYSE:LNC) are both mid-cap finance companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, earnings, analyst recommendations, profitabiliy and risk.

Profitability

This table compares Voya Financial and Lincoln National Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Voya Financial -7.67% 3.68% 0.25%
Lincoln National Corporation 10.85% 10.99% 0.64%

Dividends

Voya Financial pays an annual dividend of $0.04 per share and has a dividend yield of 0.1%. Lincoln National Corporation pays an annual dividend of $1.16 per share and has a dividend yield of 1.6%. Voya Financial pays out -1.0% of its earnings in the form of a dividend. Lincoln National Corporation pays out 17.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Voya Financial has increased its dividend for 6 consecutive years.

Analyst Recommendations

This is a summary of recent ratings for Voya Financial and Lincoln National Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Voya Financial 1 1 8 0 2.70
Lincoln National Corporation 0 5 4 0 2.44

Voya Financial presently has a consensus target price of $46.11, suggesting a potential upside of 13.21%. Lincoln National Corporation has a consensus target price of $72.33, suggesting a potential downside of 2.70%. Given Voya Financial’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Voya Financial is more favorable than Lincoln National Corporation.

Risk & Volatility

Voya Financial has a beta of 1.62, suggesting that its share price is 62% more volatile than the S&P 500. Comparatively, Lincoln National Corporation has a beta of 1.99, suggesting that its share price is 99% more volatile than the S&P 500.

Institutional & Insider Ownership

80.2% of Lincoln National Corporation shares are held by institutional investors. 0.2% of Voya Financial shares are held by insiders. Comparatively, 1.4% of Lincoln National Corporation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares Voya Financial and Lincoln National Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Voya Financial $9.99 billion 0.76 -$486.40 million ($3.83) -10.63
Lincoln National Corporation $13.86 billion 1.19 $2.17 billion $6.52 11.40

Lincoln National Corporation has higher revenue and earnings than Voya Financial. Voya Financial is trading at a lower price-to-earnings ratio than Lincoln National Corporation, indicating that it is currently the more affordable of the two stocks.

Summary

Lincoln National Corporation beats Voya Financial on 11 of the 17 factors compared between the two stocks.

Voya Financial Company Profile

Voya Financial, Inc. is a retirement, investment and insurance company. The Company operates through five segments: Retirement, Investment Management, Annuities, Individual Life and Employee Benefits. The Retirement segment is a provider of retirement services and products in the United States. The Investment Management segment offers domestic and international fixed income, equity, multi-asset and alternatives products and solutions. The Annuities segment provides fixed and indexed annuities, tax-qualified mutual fund custodial and other investment-only products and payout annuities for pre-retirement wealth accumulation and post-retirement income management sold through multiple channels. The Individual Life segment provides wealth protection and transfer opportunities through universal and variable products. The Employee Benefits segment provides stop loss, group life, voluntary employee-paid and disability products to mid-sized and large businesses.

Lincoln National Corporation Company Profile

Lincoln National Corporation is a holding company, which operates insurance and retirement businesses through subsidiary companies. The Company sells a range of wealth protection, accumulation and retirement income products and solutions, through its business segments. The Company operates through four segments: Annuities segment, which offers fixed (including indexed) and variable annuities; Retirement Plan Services segment, which provides employers with retirement plan products and services; Life Insurance segment, which focuses on the creation and protection of wealth through life insurance products, and Group Protection, which offers principally group non-medical insurance products. These products include fixed and indexed annuities, variable annuities, universal life insurance, variable universal life insurance, linked-benefit UL, term life insurance, indexed universal life insurance, employer-sponsored retirement plans and services, and group life, disability and dental.

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